Equity Protection -- Why You Should Avoid Real Estate Agents

A small percentage of your selling price is a BIG percentage of your equity !

Let's say your house is worth $400,000 and your equity is $60,000.
Let's say you hire a real estate agent who charges the customary 6% commission.
If your home sells for its value, you'll end up paying the agent $24,000.
There goes 40% of your equity.
There goes a significant chunk of real, hard cash that cannot be recouped.

$400,000 house
$60,000 equity
$24,000 real estate commission at 6%
= 40% of your equity gone !

Your home equity is like your 401(k): these things are financial Holy Grails. Unless it's a matter of life or death or putting food on the table, don't touch either.

You might be thinking that you have no choice. That's how the system works. That's what you have to do when you sell a home, right? WRONG. One of the only ways to avoid giving away your equity and hard-earned money is to cut out the middle man altogether... the real estate agent. Whenever I tell people this, I get one of two responses: the first - "well, that makes sense" and the second - "I can't sell my own home... is that even allowed?"

I have good news. It does make sense, and YOU ARE ALLOWED TO SELL YOUR OWN HOME!!! Real estate agents market your house and hold your hand (and that is if you find a really good one). They make it seem as though they are working tirelessly to sell your home and your home only. That is not the case.

This is a crucial fact to understand: the issues involved in selling a home are the same, no matter the price point. Although I live and work in Houston, I've closed huge deals and consulted all over the country. I've sold homes from five to eight figures in value, and the same problems and solutions came up every time.

And the reason I'm so sure that you can sell your own home is that, for the last twenty-two of the twenty-eight years, I've been working as an independent agent.

I started my real estate career at a big firm, but I quickly realized I could not be happy with the inefficiency I saw there. I wanted to work-but it seemed to me the agents accomplished little while creating "busy work" so they could justify their commissions.

Real estate firms are known for their flamboyance. The brands in the parking lot are Mercedes, BMW, occasionally even Rolls Royce-and they're always in the society section of the newspaper. You get the picture.

Most of the heads of these firms are rich, but they're also out of touch with current reality. Many of them have not sold a home since the Internet was invented!

These same executives all said I would fail as a one-woman operation because I could not compete with "the big boys." They called me unprofessional because I didn't have a store-front office. Now they are all trying to negotiate out of their office space leases and rent smaller spaces because so much real estate business today is done at the local Starbucks. I guess my approach no longer seems so unprofessional!

They might call my success a "fluke," but twenty-two years is a very long fluke.

Once I started making big money, these same agency owners would invite me to lunch and let me know that if I ever wanted to come on board, I would be welcome. They began to offer me assistants and a higher commission split, so I could "travel"-and I guess then I'd be in the society pages, too!

These executives have a hard time understanding how a single person could outperform their top producers without spending wildly. Yet I am doing just that. My only overhead is my monthly internet bill.

They still live in the world where they think they need an advertising department for newspaper ads, sales meetings and managers, an appointment desk, and lots of unused office space in order to sell houses. This antiquated business model works for them, but they are charging their customers for it-and the customer does not have a choice. Don't let that customer be you.

I believe competition is for the competent, and it is time to give real estate agencies some real competition.

I work for myself and by myself, and it's taught me that working alone is truly the best way to streamline this process down to the essentials while never forgetting a detail.

As a person who wants to buy or sell a home, you don't have a real estate office with a receptionist to make appointments, do you? Well, neither do I. If I can sell homes with my laptop, you can see how unimportant the real estate office really is.

The perks of being a one-woman show are unending. For one, I make a lot more money than other real estate agents because I don't have to pay for assistants and a bunch of assorted staff. Best of all, working on my own allows me to deal with people directly, which makes this business a lot easier and more efficient.

I can't tell you how many times I've been on the phone with another real estate agent and wanted to scream, "Can I please just talk to your client?" It's so much easier when you're dealing directly with the people who make the decisions.

Here's an example. Although it is an extreme case, it makes an important point.

I once had a $9.4 million deal that was about to fail because the buyer and seller were $200,000 apart and neither wanted to budge. In an unorthodox move, I asked the listing agent if I could call the seller (a famous basketball player) directly.

When I got the guy on the phone, I asked him what I could do to keep this deal from falling through-and I kept him chatting for a little bit. During our conversation, it came up that he and his friends were still looking for a place to stay in San Diego during the Super Bowl.

"That whole town is booked up solid," he complained.

"Well, I happen to know someone who has an empty condo in San Diego," I said, "and it's the guy who wants to buy your house."

"Are you serious?"

"I am. So I have an idea. Would you come down $100,000 on the price of your house if the buyer comes up $100,000-and throws in his San Diego place for the weekend?"

The deal was closed within minutes. In fact, the buyer and seller are now friends.

You might not be selling a multi-million dollar home-your ace might be something like the barbeque pit in the back yard-but the same principles apply. Talking directly to the person making the buying decisions can make all the difference when you sell your house. Only you know all the details that might make the deal work.

First, the commission you pay is rarely worth the time you could put in to sell the home yourself. Don't let a real estate agent tell you otherwise. Second, working directly with a buyer can make for easier transactions, selling your home much faster and giving you room to negotiate. Real estate agents fear negotiations... because it directly affects their commission.

Don't let your hard-earned money because someone elses hardly-earned commission!

Not only can you sell your own home, you should.



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